Chaos Labs’ Post

#cryptocurrency #risk #audit #compliance To the moon 🚀 Big shoutout to the incredible #compliance team at #Agora! I may be biased, but check out this mini excerpt from the risk audit report. "During the audit process, the Agora team demonstrated exceptional transparency, particularly in their KYB and Compliance practices. We had the opportunity to meet with their dedicated KYB/Compliance team, who provided insights into their robust processes. Agora adheres to U.S. standards for KYB, implementing protocols comparable to institutional onboarding at major exchanges like Coinbase."

Imagine a world where the one-size-fits-all approach doesn't cut it anymore, especially when it comes to the intricate world of asset management. We're moving from a software-centric view to a vast, interconnected platform economy operated by financial service providers. This transition poses a significant challenge for "buy-side" industry companies operating across various countries, as they navigate local regulatory demands for sovereignty, data protection, and the regulatory disparities of different geographical zones. The DORA regulatory framework is a prime example of the drive towards enhanced IT security and operational resilience among financial institutions operating in the EU. Harman Singh's article in Infosecurity Magazine provides a clear overview of its potential impact. Given the current geopolitical tensions, it is unthinkable for technology providers to adopt a one-size-fits-all approach for serving Europe, Asia (especially India and China), or America. Significant investments and the customisation of solutions tailored to each geographic area are essential. It's fascinating to speculate which players will be capable of offering these variations in the coming years... As we move forward, the ability to adapt and innovate within these constraints will not only define success but also shape the future landscape of global financial services. https://lnkd.in/eic8YJ9p

Governance, Risk and Compliance (GRC) isn't just about following rules; it's about building resilience for today's complex world. In this recent research I delve into everything from environmental concerns to new tech, and how these trends shape businesses operate. In a world of increasing scrutiny, focusing on GRC helps businesses stay compliant, manage risks, and grow sustainably. Operating globally means facing diverse rules and cultures, but strong GRC strategies build trust and keep operations smooth across borders. Rules change fast, and good GRC means staying ahead, managing risks, and sticking to the rules to stay on track. Ankush Mohan Read the full paper here: https://dxc.to/3xREbfN

Governance, Risk and Compliance (GRC) isn't just about following rules; it's about building resilience for today's complex world. In this recent research our DXC team delve into everything from environmental concerns to new tech, and how these trends shape businesses operate. In a world of increasing scrutiny, focusing on GRC helps businesses stay compliant, manage risks, and grow sustainably. Operating globally means facing diverse rules and cultures, but strong GRC strategies build trust and keep operations smooth across borders. Rules change fast, and good GRC means staying ahead, managing risks, and sticking to the rules to stay on track. https://lnkd.in/grEe53Sq

Authorisation Requirements For High Frequency Trading Firms In The UK High-Frequency Trading (HFT) firms operating in the UK must adhere to a stringent set of regulatory requirements to ensure market integrity and stability. The primary regulatory body overseeing HFT activities in the UK is the Financial Conduct Authority (FCA). Here are the key authorization requirements and steps for HFT firms in the UK: 1. FCA Authorisation Application Process Firm Registration: Firms must register with the FCA and obtain the necessary permissions to engage in HFT activities. Application Submission: Submit a detailed application via the FCA's Connect system, including all required documentation and information. Required Documentation Business Plan: A comprehensive business plan detailing the firm’s operations, strategy, and how it intends to comply with regulatory requirements. Organizational Structure: Information on the firm’s organizational structure, including the roles and responsibilities of key personnel. Financial Information: Financial statements, capital adequacy details, and funding sources to demonstrate financial stability. 2. Compliance with MiFID II Algorithmic Trading Requirements Systems and Controls: Implement robust systems and controls to ensure the resilience and capacity of trading systems. This includes real-time monitoring, automated risk management, and stress testing. Algorithm Approval: Each algorithm used for trading must be approved and monitored. Firms must ensure that algorithms do not contribute to disorderly trading or market abuse. Pre-Trade Risk Controls: Implement pre-trade controls such as maximum order sizes and price checks to prevent erroneous trades. Transparency and Reporting Transaction Reporting: Report all trades to the FCA in compliance with the Markets in Financial Instruments Regulation (MiFIR) to ensure transparency. Algorithmic Trading Notifications: Notify the FCA about the use of algorithmic trading systems and provide information about the algorithms used. 3. Risk Management and Resilience Risk Controls Market Risk: Establish comprehensive risk management frameworks to identify, monitor, and mitigate market risks associated with HFT. Credit and Operational Risk: Implement measures to manage credit risk and operational risks, including system failures and cyber threats. Business Continuity Planning Disaster Recovery: Develop and maintain disaster recovery plans to ensure business continuity in the event of system failures or other disruptions. Backup Systems: Ensure redundancy in trading systems and data to prevent loss of critical functions during outages.

Swiss banks face several critical challenges from a risk perspective. These are the five most important ones for 2024: Market Risk Volatility: Global economic uncertainty and rapid interest rate changes create significant fluctuations in asset prices and trading activities. Liquidity Risk Management: Sudden market shocks and reliance on short-term funding sources necessitate robust liquidity buffers and contingency planning. Operational Risks and Cybersecurity: The increasing frequency of sophisticated cyberattacks demands advanced cybersecurity measures and resilient operational frameworks. Technological Transformation and Data Management: The need to integrate advanced technologies and manage vast amounts of data requires effective governance and compliance with data protection regulations. Environmental, Social, and Governance (ESG) Risks: Addressing climate risks and meeting ESG criteria is essential to maintaining investor confidence and regulatory compliance.

Technology can help drive a more equitable and sustainable future, but its impact hinges on reducing digital transformation risks. Read about ADB’s digital risk assessment tools and discover ways to better weave technology into development programs. Read and download it here. https://ow.ly/VRxy50QRQZP

Mckinsey's take on how Gen AI could strengthen the regulatory and compliance agenda in the financial sector during the coming years. Very inspiring and specifically targeting these areas: Regulatory compliance Financial crime Credit risk Modeling and data analytics Cyber risk Climate risk

I recently attended an insightful webinar on "New Trends in Risk Management" by Riskonnect, Inc.! Here are some key takeaways: 1️⃣ Incident Management and Contingencies Preparedness: In the crypto sphere, readiness for disruptions is paramount. Robust incident management protocols are essential for addressing security breaches and market volatility effectively. 2️⃣ Professionalization and Extended Scope: As crypto matures, professionalization becomes imperative. Risk management must extend beyond finance to include operational resilience and regulatory compliance. 3️⃣ Focus on Controls and Resilience: Crypto firms emphasize controls and resilience to navigate complexity. Proactive measures are crucial against cyber threats and regulatory shifts. 4️⃣ Utilizing AI and Data Analytics: Integration of AI and data analytics offers crypto firms valuable insights. From bolstering security to understanding market trends, advanced tech enhances decision-making. 5️⃣ Quantifying Risks and Benefits: In crypto, quantifying risks and benefits is vital. Tangible metrics inform decision-making, assessing incident impacts, and measuring risk management effectiveness. 6️⃣ Building Resilience Through Collaboration: Collaboration within the crypto community fosters resilience. Sharing best practices and participating in data consortiums prepare firms for emerging risks. By staying informed about the latest trends and adopting proactive risk management strategies, crypto firms can position themselves for long-term success in an ever-changing landscape. Would you be interested in enhancing your business continuity planning? Please get in touch with Landis for tailored strategies at  emily@emilylandiswalker.com Let's continue to innovate and collaborate as we navigate the exciting journey ahead! #RiskManagement #WebinarInsights #BusinessTrends Chris Ekai James Burnie FRSA  Mark Bittinger  Lori Souza MBA, BSIT Andrea Perlak Rohan Ehsan Jaidev Iyer  Oonagh van den Berg (Lady)

#RiskOps in #trading is a specialized area focused on managing and mitigating risk. Here the principles: -Risk is quantified uncertainty -Uncertainty is in all markets and assets -Not all uncertainties can be quantified -Not all uncertainties impact equally -Uncertainties are non-linear -Risk never disappear, only change -All risks must be linked to targets -All trades match with a level of risk -Risks can be linked to opportunities (worthy risk), but also threats (worthless risk) -Opportunities and threats are asymmetric -Deal systematically with both threats and opportunities -No #ML models are correct -Strategy before tactics -Without risk response planing, you are planing to fail Talking about operational risk, it involves a combination of 3 main pillars (strategies-processes-technologies): 1) Strategies: -Diversification -Hedging -Position sizing 2) Processes: -Risk assessment & profiling -Risk limits & controls -Trade validation & reconciliation 3) Technologies: -#ML & branches -Analytics tools -Algorithmic trading platforms This framework revolves around the concept of operational resilience. It encompasses a comprehensive set of strategies and practices to ensure the effectiveness of trading. Here a list of several key components: -Identification of potential risks in trading operations -Assessment of risks' impact and likelihood -Quantification of risks' magnitude and implications -Formulation of effective strategies to mitigate identified risks -Integration of ML models for risk analysis -Exploration of potential risk scenarios and interactions -Stress testing to evaluate operational resilience -Continuous monitoring -Data analytics for insightful risk reporting -Consideration of regulatory implications on risk management Basic methods where you can apply RiskOps: |-Maximize profit |-Minimize risk |-Bet sizing |-Bet concentration/unit of time |-Greedy asset selection |-Systems weights |-OF identification |-Hedging logics